Question 1

The normal balance of Accounts Receivable is a __________because it is a(n)_________ account.
A)credit, liability
B)debit, asset
C)credit, stockholders' equity
D)debit, expense

Accepted Answer

The normal balance of Accounts Receivable is a debit because it is an asset account. This means that when a business extends credit to a customer, it expects to receive payment in the future, and Accounts Receivable represents the amount owed by those customers. As such, it is a current asset that is expected to be converted into cash within one year, so it has a normal debit balance.

Question 2

Which statement about a trial balance is NOT true?
A)The trial balance can be prepared at any time, but is generally prepared at the end of the accounting period.
B)The trial balance is a list of all accounts with their balances.
C)The trial balance lists the income statement accounts and their balances first and then the balance sheet accounts and their balances.
D)The trial balance lists asset accounts and their balances first, then liability accounts and their balances, and then stockholders' equity accounts and their balances.

Accepted Answer

The statement that is not true is C, which states that the trial balance lists income statement accounts first and then balance sheet accounts. In reality, the trial balance lists accounts in the order of their appearance in the chart of accounts, which varies based on each company's individual account structure.

Question 3

The normal balance of the Supplies account is a __________ because it is a(n)__________ account.
A)credit, liability
B)debit, stockholders' equity
C)credit, expense
D)debit, asset

Accepted Answer

The best choice is D because the normal balance of an asset account is a debit, and the Supplies account is an asset account because it represents items that the company owns and will use in the future.

Question 4

The normal balance of the Common Stock account is a __________ because it increases __________.
A)debit, assets
B)debit, expenses
C)debit, stockholders' equity
D)credit, stockholders' equity

Accepted Answer

Common Stock represents ownership in the company and increases in stockholders' equity. Therefore, it has a credit normal balance.

Question 5

The normal balance of the Accounts Payable account is a __________ because it is a(n)__________ account.
A)credit, liability
B)debit, stockholders' equity
C)credit, expense
D)debit, asset

Accepted Answer

The normal balance of the Accounts Payable account is a credit because it represents a liability, which is an obligation owed by the company to its creditors.

Question 6

When using a four-column ledger account format, the pair of columns on the far right is used to show the:
A)names of the accounts being debited and credited.
B)transaction dates and journal reference.
C)account balance.
D)debit and credit amounts posted from journal entries.

Accepted Answer

The answer of When using a four-column ledger account format,...

Question 7

ABC Company had a beginning cash balance of $10,000, received cash of $8,000 and ended the month with a cash balance of $6,000. Cash payments for the month
A)were $6,000.
B)were $24,000.
C)were $12,000.
D)cannot be determined from the information given.

Accepted Answer

The cash payments for the month can be calculated as follows: 
Beginning cash balance + Cash received - Ending cash balance = Cash payments 
$10,000 + $8,000 - $6,000 = $12,000 
Therefore, the correct answer is option C - cash payments for the month were $12,000.

Question 8

The accounts receivable account for James Rivers Inc. had a beginning balance of $6,000. During the month, the company received payments of $8,000 and additional accounts of $11,000. The ending balance in accounts receivable is _____ and is a ______.
A)$9,000, credit
B)$9,000, debit
C)$3,000, debit
D)$3,000, credit

Accepted Answer

The ending balance is calculated as the beginning balance ($6,000) plus additional accounts ($11,000) minus payments received ($8,000), resulting in $9,000. Accounts receivable is an asset account, which normally has a debit balance.

Question 9

ABC Company had a beginning Accounts Receivable balance of $10,000, and had $12,000 of sales on account for the month. The ending Accounts Receivable balance was $14,000. Collections on Accounts Receivable for the month:
A)were $12,000.
B)were $36,000.
C)were $8,000.
D)can't be determined from the information given.

Accepted Answer

Collections can be calculated by adding the beginning balance to sales on account and then subtracting the ending balance. Thus, collections on accounts receivable for the month would be $8,000 ($10,000 beginning balance + $12,000 sales on account - $14,000 ending balance).

Question 10

A chart of accounts is:
A)prepared as the first step in analyzing transactions.
B)a source document.
C)a list of all of the accounts of the organization.
D)a list of all of the accounts of the organization and their related account numbers.

Accepted Answer

A chart of accounts is a complete list of all the accounts used by an organization to track financial transactions. It typically includes account names and numbers to clearly identify each account. It is an essential tool for accurate financial reporting and analysis, and it allows businesses to organize their financial information in a systematic and orderly manner. Choosing option D is the best answer as it accurately describes a chart of accounts.

Question 11

A trial balance has total debits of $720,000 and total credits of $850,000, with a debit balance of $65,000 for notes payable. This situation indicates:
A)a slide.
B)an incorrect posting.
C)a transposition.
D)that none of the above are correct.

Accepted Answer

The answer of A trial balance has total debits of...

Quiz 2: Transaction Analysis

The normal balance of Accounts Receivable is a __because it is a(n) _ account.

Which statement about a trial balance is NOT true?

The normal balance of the Supplies account is a because it is a(n) account.

The normal balance of the Common Stock account is a because it increases .

The normal balance of the Accounts Payable account is a because it is a(n) account.

When using a four-column ledger account format, the pair of columns on the far right is used to show the:

ABC Company had a beginning cash balance of $10,000, received cash of $8,000 and ended the month with a cash balance of $6,000. Cash payments for the month

The accounts receivable account for James Rivers Inc. had a beginning balance of $6,000. During the month, the company received payments of $8,000 and additional accounts of $11,000. The ending balance in accounts receivable is _ and is a __.

ABC Company had a beginning Accounts Receivable balance of $10,000, and had $12,000 of sales on account for the month. The ending Accounts Receivable balance was $14,000. Collections on Accounts Receivable for the month:

A chart of accounts is:

A trial balance has total debits of $720,000 and total credits of $850,000, with a debit balance of $65,000 for notes payable. This situation indicates: